Federal Bank Q4 Review - On A Very Steady Path: Prabhudas Lilladher
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Prabhudas Lilladher Report
Federal Bank Ltd. reported strong earnings of Rs 4.8 billion (our estimate: Rs 3.8 billion) aided by much lower provisioning.
Although bank did maintain a steady provision coverage ratio of 66% and slippages of Rs 5.98 billion was higher than trends but manageable.
It ended with slippage ratio of 1.5% and with lower baggage of unsecured.
Operationally it was marginally weaker than expectation mainly on slightly slower net interest income and non-treasury non-fee income.
Overall asset quality remains steady although given that Covid 2.0 impact is uncertain and no buffer of provisions, incremental slippages will put direct pressure on profit and loss and needs to be watched.
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